FRED’S Inc. (FRED’S) operates discount general merchandise stores in 15 states primarily in the southeastern United States. FRED’S stores generally serve low, middle and fixed income families located in small- to medium- sized towns. As of January 29, 2011, the Company operates 653 discount general merchandise stores, and 313 full service pharmacies. The Company also markets goods and services to 24 franchised FRED’S stores. FRED’S stores stock over 12,000 frequently purchased items, which address the everyday needs of its customers, including FRED’S label products and lower priced off-brand products. FRED’S stores have average selling space of 14,319 square feet. During the fiscal year ended January 29, 2011 (fiscal 2010), FRED’S opened 15 stores and closed seven stores. During fiscal 2010, the Company added 21 new pharmacies and closed 15 pharmacies.